Unintended consequences

By Jaime Netto

In The 18th Brumaire of Louis Bonaparte (1852), Karl Marx stated: Men make their own history, but they do not make it as they please; they do not make it under self-selected circumstances, but under circumstances existing already, given and transmitted from the past.

By reference to this, Marx was suggesting that, in any given political and economic circumstances, some traditions and structures condition our present. The weight of previous generations moulds, to some extent, the thoughts we have when we arrive at a political crossroads, and determines, to a significant extent, the road ahead and the route we take to advance our collective wellbeing as a people.

This process may seem too deterministic, but the balance among various agencies and political entities also shapes the standard of living in our communities at the political crossroads when decisions are made.

Throughout my life, I have witnessed many important events that have shaped Gibraltar as it is today. The land frontier closure in 1969; the General Strike of 1972; decades of trade union activism throughout the 1970s,80s, 90s; the dockyard closure; MoD expenditure demise within Gibraltar’s GDP; the changing face of our workforce in the last 40 years; the never ending changes to our landscape due to housing developments; the exponential increase in the size of the labour force; the demise of bilingualism among the younger generations; the co-sovereignty proposals of Blair and Aznar; Gibraltar’s exit from the EU; and now what is imminent, the implementation of a bespoke agreement in which Gibraltar will access the Schengen area of the European Union. I am sure other people would select different important features into the political cocktail to produce an outcome more in line with their recollection of historical facts.

That said, what I am pointing to is that, to a large degree, we have historically been driven by unintended consequences originating elsewhere.

For instance, the capture of Gibraltar by Anglo-Dutch forces in 1704 was a result of Britain emerging as an imperialist power seeking to expand, control and pursue its commercial interests in this part of the globe.

As others have said before, ‘the fortress came first’, with a subsequent civilian population that coalesced together from different countries. But for much of that historical timeline, we have been second-class citizens with colonial structures to subdue our rights as a people.

Thanks to the efforts of what was then called the ‘Young AACR’ and others, our first steps towards our emancipation as a people commenced.

This was possible not just because of the foresight of those leaders at the time, important as it was (Hassan, Risso, Huart, Fava, amongst others), but also because of the accumulated consciousness of our people after the Second World War, unwilling to be subjugated to colonial status.

The Spanish dictator Franco's decision to close our land border with La Linea was chaotic and transformative. This had huge repercussions on our daily lives, both economically and socially.

Following the removal of the Spanish labour force, Spanish produce, including sensitive hospital equipment, was removed overnight.

Despite such tumultuous events, our economy became reliant on other sources for labour (Morocco) and services and equipment from other jurisdictions.

One event that flowed from the new economic conditions was the militancy of trade unionists, which helped address low pay and horrendous working conditions in what was then a primarily public-sector economy.

The industrial strife during the 1974/78 parity of wages in the MoD to eliminate the apartheid pay structure based on nationality and not the work done, regardless of nationality, brought about further strengthening of working people's consciousness as a class.

The struggle for occupational pensions in the Public Sector was a further important milestone for working people.

It acted as a catalyst for further progress in other areas. The Dockyard closure in 1983 was a significant challenge to the economic model that had served Gibraltar throughout the past.

Recalling from memory that some 80% of our GDP then emanated from MoD expenditure. The decision by Margaret Thatcher to close several MoD Dockyards posed a significant challenge to our then-staple economy, with the highest level of Gibraltarians out of work reaching 995 in December 1995.

Yet, once again, Gibraltar experienced economic diversification, moving from a predominantly blue-collar workforce to a white-collar service sector in financial services and tourism. The diversification of the economy led to higher employment, from a total workforce of 12,980 in May 1996 to 31,634 as seen in the latest available Employment Survey in October 2024.

The ever-changing face of our society can be glimpsed in the structural changes to our workforce composition and the radical development of our housing infrastructure.

Ask someone of my generation about the Gibraltar of the past, and most will have a nostalgic experience in which they now feel that modern Gibraltar, whilst improving the standard of living of its people, has re-shaped the characteristic features of companionship and solidarity of yesteryears within the community. The individualisation of people’s character over decades of neoliberal doctrine worldwide has affected our community too.

Coming back to unintended consequences, we have witnessed how, through the Brexit debacle, the British Government prioritised its national interest, followed by securing a deal for Northern Ireland, leaving Gibraltar unresolved for a considerable period of time.

Time in politics is a luxury, because as the saying goes, ‘a week in politics is a long time’. The experience we have from the Brexit saga is that the British economy is much worse than it was before the exit, with a smaller economy, diminished business investment, and a greater trade imbalance.

In relation to the new agreement to be hopefully implemented, I am intrigued by the comments made by friends of mine across the political divide in which they all seem to agree that once Britain pulled out of the EU, they left us with no choice but to negotiate the best possible deal within the constraint of the EU rules, as the other option meant drastic cuts to our standard of living and a downsizing of our economy.

From what I have been reading in the press about the agreement's details, there is understandable concern in some sectors of the economy about how the changes will impact their businesses.
Also, I have not seen any financial model that the Government has obtained at various stages of the negotiation, showing how, once implemented, this will impact the economy.

With that caveat, I believe the advantages outweigh the disadvantages. That said, what will most likely happen is that some businesses will unfortunately collapse due to new businesses entering Gibraltar.

In contrast, others will grow by reaching a much larger market than the one available today. Interesting how, for several years now, some longstanding firms from Gibraltar have already been investing in La Linea in anticipation of the agreement.

All things being equal, the agreement will change our way of life once again, not in a day or two, but over decades to come; there will be a period of profound change, but I believe, with all the caveats mentioned above, that in the long term it will be beneficial for Gibraltar.

One thing I am worried about is the new two-tier employment criteria in some sectors, primarily in the GHA, that channel Spanish employees into private firms with no job security and low pay. The conditions are much inferior to those of public employees in the GHA for doing the same work.

This is morally unjust and will be a source of permanent friction both in the workplace and politically in the new era we are about to embark on.

I can fully understand how some individuals are reticent about changes to their lives or businesses. Still, the days when we were an island economy have long gone, and changes elsewhere do impact upon us even if not immediately.

The period for more unintended consequences may not be over, but our desire to foster new opportunities must go on.

As Marx said in the 18th Brumaire, we make our own history, not as we please, but under the circumstances available at the time, given and transmitted from the past. Challenges will appear from time to time; the world is in constant flux, constantly changing. Therefore, we must adapt, resolve them, and move forward as a community.

Jaime Netto is a former trades unionist and GSD MP who served as a Government minister in four administrations.